CLAYTON — Voters appear to have sent two City Council incumbents back for new four-year terms and chosen a perennial candidate for his first term on the council.

Julie Pierce and Howard Geller have a commanding lead with eight of the city’s 10 precincts reporting. Challenger Jim Diaz, who has run unsuccessfully for council several times over the past decade, took a lead of about 1.5 percent over Kevin Liberman for the third and final seat.

The race made news with the conviction of incumbent Joe Medrano on one count of felony embezzlement in October.

A jury found Medrano, an insurance broker, guilty of taking $159,000 from a Redwood Shores-based client and never forwarding the money to the insurance company.

After fighting the claims throughout the court proceedings, Medrano resigned from office three days after the verdict. The verdict, however, came too late for Medrano’s name to be removed from the Nov. 6 ballot.

However, 629 people have voted for Medrano so far, according to unofficial results.

The future of the downtown area was a focus of the campaign, with candidates agreeing it will be the driving force of city revenue and could determine whether the city can continue to survive the economic downturn. They also agreed that any development of downtown could not come at the expense of the three-block downtown’s quaintness, but they had different ideas for what should go there.

Diaz, the vice president of the membership for the Clayton Business and Community Association, called himself the “champion of revenue generation” during the campaign. The former planning commissioner, who has run unsuccessfully in several City Council races, said he would work to get more retail downtown.

The current mayor, Geller, proposed bringing more high-density housing downtown to draw more foot traffic. He also favored the idea of closing off some street to traffic to create plazas.

Liberman had the opposite opinion, saying an overcrowded downtown was what ruined his Southern California hometown. Liberman wanted retail that will attract people to Clayton from elsewhere.

Pierce, who is seeking a sixth term, told voters she worked on the downtown plan while on the Planning Commission and is eager to see it come to life, with several buildings in downtown prime for development, including the former Pioneer Inn at the gateway to downtown.

Pierce said market studies have shown the downtown would benefit from restaurants or a venue such as a jazz club.